Sanchez, Chavez stick to contrasting Manchester views

OCEANSIDE -- Two Oceanside City Council members reiterated their
opposing viewpoints Tuesday over the city's $2.2 million settlement
with Manchester Resorts, emphasizing how the contentious issue has
polarized the beachfront city.

At an editorial board meeting of the North County Times, council
members Rocky Chavez and Esther Sanchez both stuck to their
positions that the deal was good and bad for the city,
respectively.

Chavez described the settlement as a good "business decision,"
in part because it allows the city to move expeditiously in
securing a new beachfront resort on the two-block site near the
Oceanside Municipal Pier.

Sanchez countered that the city had a strong legal position in
the dueling lawsuits between the city and Manchester. She said the
city shouldn't have settled for anything more than what it would
have cost the city in legal fees if the dispute had gone to court,
or about $600,000.

Moreover, Sanchez said, the settlement gave the public the
perception that the City Council had made a mistake by approving
the project in 1998, contributing to a general lack of credibility
for the council.

Last week, the council voted 3-2 to approve an out-of-court
settlement that ended the two lawsuits with the developer. Chavez
joined Mayor Terry Johnson and Councilman Jack Feller in voting for
the settlement. Sanchez and Councilman Jim Wood voted against
it.

Manchester had been seeking more than $15 million in damages
from the city, alleging breach of contract and negotiating in bad
faith. Manchester claimed the city failed to honor an exclusive
negotiating agreement it signed with Manchester in 1998 to build a
475-room, 12-story resort hotel at the beach.

The city pulled the plug on the project after the California
Coastal Commission refused to approve the resort. Oceanside then
pre-emptively sued Manchester in September in an attempt to weaken
the developer's legal standing after Manchester threatened to sue
the city.

On Tuesday, neither Sanchez nor Chavez could provide reasons why
city lawyers felt Oceanside faced enough liability over the failed
Manchester project to lead to a $2.2 million settlement.

Despite their different points of view on the lawsuit, Chavez
and Sanchez said they both felt Manchester didn't deserve any
money.

Chavez pointed to the uncertainty of the court system as a
reason to settle the lawsuit. He also cited vague claims in
Manchester's lawsuit that alleged the city negotiated in bad faith
because some council members had derided the project in public
before it went to the Coastal Commission.

Manchester's claim also alleged the city got several financial
"windfalls" by acquiring two properties at below-market values and
then terminating its agreement with the developer. The two sites
are beachfront resort sites bounded by Pacific Street, Pier View
Way, Myers Street and Seagaze Drive, and a 445-acre former sand
mine in central Oceanside known as El Corazon.

Sanchez contended that Manchester had never intended to develop
the site. She said developer Doug Manchester had sued over projects
he never built and then received money for his efforts. As an
example, she pointed to Manchester receiving $5 million from the
San Diego Unified Port District over a similar dispute of a
proposed resort at the former Campbell Shipyard.

Chavez said that the city isn't rich and needs money to pay for
services and employees, adding that the beachfront property was one
of the keys in generating new property and hotel taxes. Settling
the lawsuit clears the way for the city to develop the property, he
said.